UA regents vote for consolidation, while students and creditors worry about future
Three schools could become one.
The University of Alaska Board of Regents voted Tuesday to consolidate the three schools in the university system into one school with satellite campuses.
UA President: 'This is the better way to go'
UA President Jim Johnsen compared the university's financial situation to a house on fire, with very little time to make important decisions about the university's future. He pushed for a plan that would restructure the university system into a single, accredited university with multiple campuses.
"I think this is the better way to go to ensure that our students have full access to our programs and courses and we can do so cost effectively," he said.
On Tuesday, regents considered two paths to deal with $136 million in budget cuts. One proposal would have kept the current system of three, separately accredited universities — Anchorage, Fairbanks and Southeast — and spread the cuts among them.
Chancellors of those universities, including University of Alaska Anchorage Chancellor Cathy Sandeen, favored that approach and pledged a new willingness to work together to reduce costs.
But Johnsen wanted the more radical approach of a single university, which regents ultimately endorsed with an 8-3 vote.
Johnsen said significant savings could come from eliminating administrative costs and staff by combining programs.
"So instead of having roughly 18 colleges and schools at our three universities, we would look at nine or so, which is a lot more simplification," he said.
On Monday, the Legislature approved a budget bill that restores $110 million into the university’s budget. However, Johnsen said he believes restructuring is the way to go even if some of the funding is ultimately restored to the budget.
Following the vote, UAA Chancellor Sandeen said it was not the outcome she had wished for but added she would work with Johnsen as he puts together a plan. Sandeen said she hopes whatever the final outcome, regents make a point of putting students' needs first.
Students concerned for programs on 'chopping block'
For many UAA students, the regents' decision has left them with more questions than answers.
"I'm a management marketing major and I'm going to be a junior," UAA student Brooke Badura said. "I think that kind of puts me in a weird spot because if I was a senior I'd probably feel more safe."
With two years left before graduation, Badura isn't sure what her plan of action should be.
"Being a junior it almost feels like I shouldn't transfer out, that I should try and finish here," Badura said. "My main concern right now is if they are going to consolidate the colleges."
The uncertainty also weighs heavily on the mind of UAA sophomore Matthew Pacillo.
"I just found out from the draft document that my programs are possibly on the chopping block," Pacillo said. "Sociology and political science, so not only one of my programs but both of them."
Pacillo now has some tough and potentially life-changing decisions ahead of him.
"I'm really concerned because I have no idea what classes I'm supposed to take for this fall semester. I don't know what degree I need to focus on. I don't even know if my major is going to be here in a year or two," he said.
Student athletes, many from the Lower 48, have also voiced their concerns.
"We're really nervous that we're here for no reason," UAA junior and volleyball player Jalisa Ingram said. "We came up early to get work in and we're just nervous that there no point to our season. We are putting in all this work, we are in the weight room, we are here for like 12 hour days. For what? We won’t be able to get out soon enough if they make these decisions as fast as they want to."
Ingram is from Arizona and while her team's season might be safe, she has concern for the athletes in the spring season.
"I guess you could say we're a little lucky," Ingram said. "We are earlier and it looks like the spring is going to take the biggest cuts to this. We don't want this to be our last season, you know. We still don't know, they still could cut our fall sports."
Many student athletes are joining together on Twitter to fight for their programs.
Using the hashtag #AKLeg, athletes reached out to their legislators in an effort to fight for their programs. One of those athletes is junior Tere Alonso, a UAA gymnast.
"We really just want to share our stories and make sure people know why we're here," Alonso said. "We came to UAA because of athletics. I'm from Virginia so coming here was a huge opportunity to be able to represent this university and I think sharing our stories could make an impact."
Alonso also feels athletics and the student athletes will help the university heal by giving the student body and sense of unity, leadership and something to look forward to on campus.
'Unprecedented' cuts and the investment community
While most of the budget reduction discussion takes place in Juneau, Anchorage and Fairbanks, Dunleavy’s university cuts also being closely watched by the investment community outside of Alaska. On July 17, Moody’s Investor Service reduced the university’s credit rating, citing the 41% cut in state funding, most of which comes from Dunleavy’s $130 million veto.
Calling the reduction an “unprecedented single year cut in state appropriations,” Moody’s dropped the university’s rating three notches, meaning it will cost more to finance a variety of projects.
The rating is also the nation’s second-lowest rated flagship university, trailing Puerto Rico, according to a Moody’s spokesman.
The July 17 report Moody’s stated:
“UA's strategic position has been materially impaired by this funding reduction, as well as a cut to the state's financial aid programs, and we expect a multiyear negative impact on enrollment, which was already declining, as well as the competitive position of University of Alaska's research enterprise.”
The report also says the university could receive a future upgrade “either through restoration of stronger state support or through strengthening of other funding streams, such as tuition revenue and philanthropy.”
On July 22, regents voted to declare financial exigency, allowing the university to act more quickly to the cuts. Two days later, Moody’s weighed in again, calling it a positive step, but one that can’t alone solve all of its problems.
In its analysis, Moody’s wrote:
“Without restructuring and sweeping changes, however, the simple declaration of financial exigency will likely have a modest or no credit impact. Financial exigency is exercised rarely due to the risks of reputational damage and increased oversight and scrutiny, including by accrediting agencies. In addition, it can lead to costly litigation.”
Part of Tuesday’s meeting of the UA Board of Regents featured a presentation from the state Office of Budget and Management, which made recommendations for how the university should execute Dunleavy’s cuts.
Budget Policy Director Mike Barnhill told the regents the administration is not issuing an edict, but starting a conversation on implementing the cuts.
Among those would be wiping out funding for research — a hallmark of the university, which has long touted its lab work on the Arctic, oil and gas, fisheries and mining.
Last week, OMB released the two-year plan, quickly triggering a response from some lawmakers, calling the department asserting itself into the discussion unconstitutional.
“It's utterly and totally inappropriate for the office of management and budget to try to micromanage a constitutional board of regents that is charged with managing the University of Alaska system,” Sen. Tom Begich, D-Anchorage, said Monday. “That's why they are written into the constitution. That is their job.”
The UA regents' vote asks President Johnsen to come up with a plan on how to merge to a single university system and present the proposal at the regent's next meeting Sept. 12.
If regents approve, Johnsen said some of the cuts could be implemented immediately although it could take a year or more before the university is fully accredited.
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